Stocks leaped higher in morning trading, pushing the Dow Jones industrial average above the critical 4,000
barrier for the first time in history, propelled by enthusiasm about the direction of the economy and a strong bond market.At noon on Wall Street, the Dow was up 40.04 at 4,013.09, breaking through its record high of 3,987.52 set Thursday.
The Standard & Poor's 500 list also rose to a new high, hitting 488.64, up 3.59, and moving through its previous high of 485.22.
The market was extending a rally that began on Wednesday, after Federal Reserve Chairman Alan Greenspan indicated the central bank may be finished raising interest rates.
His comments led analysts to hope that the Fed may have successfully engineered a soft landing for the economy, that is, moderate growth without undo inflation.
Greenspan told a House Banking subcommittee Thursday he stands ready to cut rates if the hoped-for budget deficit reduction under Congress hurts the economy.
The 4,000 level on the Dow "was apparently a target for a lot of sellers," said Michael Metz of Oppenheimer & Co. "I don't think (the Dow) stops here; I think it could go to 4,150 in the next two weeks."
Advancing issues led decliners by about 12 to 5 on the New York Stock Exchange. Big Board volume was heavy at 183.7 million shares, up from 155.82 million on Wednesday.
The enthusiasm carried other major market indexes higher as well. The NYSE composite index was up 1.73 at 264.37. The American Stock Exchange's market value index was up 1.67 at 450.25, while the Nasdaq composite was up 5.24 at 793.17.
The Dow 30 components were led higher by IBM, up 13 at 753/4; Alcoa, up 11/4 at 821/4; J.P. Morgan, up 11/8 at 923/4; and Philip Morris, up 11/8 at 593/8.
Novell Inc. led the most actives in Nasdaq trading and was up 5/8 at 211/4.